[Federal Register Volume 67, Number 63 (Tuesday, April 2, 2002)]
[Notices]
[Pages 15535-15538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-7954]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-834-807]


Notice of Final Determination of Sales at Less Than Fair Value: 
Silicomanganese From Kazakhstan

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of final determination in the less than fair value 
investigation of silicomanganese from Kazakhstan.

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SUMMARY: We determine that silicomanganese from Kazakhstan is being, or 
is likely to be, sold in the United States at less than fair value. On 
November 9, 2001, the Department of Commerce published a notice of 
preliminary determination of sales at less than fair value in the 
investigation of silicomanganese from Kazakhstan. See Notice of 
Preliminary Determination of Sales at Not Less Than Fair Value: 
Silicomanganese from Kazakhstan, 66 FR 56639, November 9, 2001) 
(``Preliminary Determination''). This investigation covers one 
manufacturer and one exporter of the subject merchandise. The period of 
investigation (``POI'') is October 1, 2000 through March 31, 2001.

[[Page 15536]]

    Based upon our verification of the data and analysis of the 
comments received, we have made changes in the margin calculations. 
Therefore, the final determination of this investigation differs from 
the preliminary determination. The final weighted-average dumping 
margin is listed below in the section titled ``Continuation of 
Suspension of Liquidation.''

EFFECTIVE DATE: April 2, 2002.

FOR FURTHER INFORMATION CONTACT: Jean Kemp, Brandon Farlander and 
Cheryl Werner, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
4037, (202) 482-0182, and (202) 482-2667 respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``Act''), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act. In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
regulations at 19 CFR part 351 (2000).

Background

    This investigation was initiated on April 26, 2001. See Notice of 
Initiation of Antidumping Duty Investigations: Silicomanganese From 
Kazakhstan, India and Venezuela, 66 FR 22209 (May 3, 2001) (``Notice of 
Initiation'').
    On May 17, 2001, Eramet Marietta Inc. and The Paper, Allied 
Industry, Chemical and Energy Workers International Union, Local 5-
0639, (``petitioners'') proposed an amendment to the scope. On July 13, 
2001, we excluded low-carbon silicomanganese from the scope of these 
investigations. See Decision Memorandum from Barbara Tillman, Richard 
Weible, and Edward Yang to Joseph Spetrini, dated July 13, 2001.
    On October 23, 2001, the Department requested further financial 
information and documentation regarding certain sales from Alloy 2000 
through Considar to customers in the U.S. market in a supplemental 
questionnaire to Kazchrome, Alloy 2000, and Considar. On October 29, 
2001, the Department modified its request for financial information and 
documentation regarding certain sales from Alloy 2000 through Considar 
to customers in the U.S. market in another supplemental questionnaire 
to Kazchrome, Alloy 2000, and Considar.
    On November 9, 2001, the Department published a notice of 
preliminary determination of sales at less than fair value (``LTFV'') 
in the investigation of silicomanganese from Kazakhstan. See 
Preliminary Determination.
    On November 16, 2001, Kazchrome, Alloy 2000, and Considar submitted 
a response to the Department's modified October 29, 2001, request of 
the October 23, 2001, supplemental questionnaire. On November 19, 2001, 
the Government of the Republic of Kazakhstan (``GOK'') submitted a 
timely request for negotiation of a suspension agreement. On December 
6, 2001, the Department requested a revised Section C database which 
reports all sales of subject merchandise during the POI based on the 
sale invoice date as the date of sale rather than the sale contract 
date and further information concerning Kazchrome, Alloy 2000, and 
Considar's November 16, 2001, response on reconciliation of Considar's 
expenses with Alloy 2000.
    On December 7, 2001, the Department published a notice of 
postponement of the final determination in the investigation, as well 
as an extension of provisional measures from a four month period to a 
period not to exceed six months. See Postponement of Final 
Determination for Antidumping Duty Investigation: Silicomanganese from 
Kazakhstan and India, 66 FR 63522 (December 7, 2001).
    We invited the public to comment on the GOK's request that 
Kazakhstan be treated as a market economy country. On December 10, 
2001, the Department received comments on Kazakhstan's market economy 
request.
    On December 11, 2001, petitioners submitted a request for a hearing 
and a request for an extension of the time period for requesting the 
hearing. On December 19, 2001, petitioners submitted additional 
surrogate country factor values pursuant to 19 CFR 351.301 (c)(3)(i). 
On December 20, 2001, Kazchrome, Alloy 2000, and Considar submitted an 
unsolicited Section B questionnaire response. On December 21, 2001, 
petitioners requested the Department return Kazchrome's, Alloy 2000's 
and Considar's December 20, 2001 unsolicited Section B questionnaire 
response. On December 21, 2001, Kazchrome, Alloy 2000, and Considar 
submitted a revised Section C database in response to the Department's 
December 6, 2001 supplemental questionnaire. On December 26, 2001, 
Kazchrome, Alloy 2000, and Considar submitted a response to the 
Department's December 6, 2001 supplemental questionnaire. On January 9, 
2002, petitioners requested an extension of the deadline for alleging 
sales below cost if the Department determines to accept Kazchrome's, 
Alloy 2000's, and Considar's December 20, 2001 unsolicited Section B 
questionnaire response.
    On January 9, 2002, through January 11, 2002, the Department 
conducted a sales and factors of production verification of Kazchrome. 
See Verification of Sales and Factors of Production for Transnational 
Co. Kazchrome and Aksu Ferroalloy Plant (February 22, 2002) 
(``Kazchrome Verification Report''). On January 14, 2002, through 
January 15, 2002, the Department conducted a sales verification of 
Alloy 2000. See Verification of Sales and Factors of Production for 
Alloy 2000 S.A. (February 22, 2002) (``Alloy Verification Report'').
    On January 24, 2002, the Department received rebuttal comments 
concerning Kazakhstan's market economy request.
    On February 13, 2002, through February 15, 2002, the Department 
conducted a sales verification of Considar. See Verification of U.S. 
Sales for Considar Inc. (February 22, 2002) (``Considar Verification 
Report'').
    On March 7, 2002, the Department requested that the petitioners 
support surrogate values they had submitted on December 19, 2001, for 
factory overhead, selling, general and administrative and financial 
ratios they had submitted for Sinai Manganese, an Egyptian ferroalloys 
producer. On March 11, petitioners submitted a copy of an original 
financial statement for updated surrogate value information, with some 
English translation. On March 12, respondents submitted comments 
rebutting this surrogate value information.
    We invited parties to comment on our Preliminary Determination. On 
March 4, 2002, petitioners and Kazchrome, Alloy 2000, and Considar 
submitted case briefs with respect to the sales and factors of 
production verification and the Department's Preliminary Determination. 
Petitioners and Kazchrome, Alloy 2000, and Considar submitted their 
rebuttal briefs on March 11, 2002 with respect to the sales and factors 
of production verification and the Department's Preliminary 
Determination. On March 13, 2002, the Department held a public hearing 
in accordance with 19 CFR 351.310(d)(1). Representatives for 
petitioners and Kazchrome, Alloy 2000, and Considar were present. All 
parties present were allowed an opportunity to make affirmative 
presentations only on arguments included in that party's case briefs 
and were also allowed to make rebuttal presentations only on

[[Page 15537]]

arguments included in that party's rebuttal brief.
    The Department has conducted and completed the investigation in 
accordance with section 735 of the Act.

Scope of Investigation

    For purposes of this investigation, the products covered are all 
forms, sizes and compositions of silicomanganese, except low-carbon 
silicomanganese, including silicomanganese briquettes, fines and slag. 
Silicomanganese is a ferroalloy composed principally of manganese, 
silicon and iron, and normally contains much smaller proportions of 
minor elements, such as carbon, phosphorous and sulfur. Silicomanganese 
is sometimes referred to as ferrosilicon manganese. Silicomanganese is 
used primarily in steel production as a source of both silicon and 
manganese. Silicomanganese generally contains by weight not less than 4 
percent iron, more than 30 percent manganese, more than 8 percent 
silicon and not more than 3 percent phosphorous. Silicomanganese is 
properly classifiable under subheading 7202.30.0000 of the Harmonized 
Tariff Schedule of the United States (HTSUS). Some silicomanganese may 
also be classified under HTSUS subheading 7202.99.5040. This scope 
covers all silicomanganese, regardless of its tariff classification. 
Although the HTSUS subheadings are provided for convenience and U.S. 
Customs purposes, our written description of the scope remains 
dispositive.
    The low-carbon silicomanganese excluded from this scope is a 
ferroalloy with the following chemical specifications: minimum 55 
percent manganese, minimum 27 percent silicon, minimum 4 percent iron, 
maximum 0.10 percent phosphorus, maximum 0.10 percent carbon and 
maximum 0.05 percent sulfur. Low-carbon silicomanganese is used in the 
manufacture of stainless steel and special carbon steel grades, such as 
motor lamination grade steel, requiring a very low carbon content. It 
is sometimes referred to as ferromanganese-silicon. Low-carbon 
silicomanganese is classifiable under HTSUS subheading 7202.99.5040.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs to this 
investigation are addressed in the Issues and Decision Memorandum from 
Joseph A. Spetrini, Deputy Assistant Secretary, to Faryar Shirzad, 
Assistant Secretary (March 25, 2002) (``Decision Memo''), which is 
hereby adopted by this notice. A list of the issues which parties have 
raised and to which we have responded, and other issues addressed, is 
attached to this notice as an Appendix. Parties can find a complete 
discussion of all issues raised in this investigation and the 
corresponding recommendations in the Decision Memo, a public memorandum 
which is on file at the U.S. Department of Commerce, in the Central 
Records Unit, in room B-099. In addition, a complete version of the 
Decision Memo can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision 
Memo are identical in content.

Changes Since the Preliminary Determination

    Based on our findings at verification, and analysis of comments 
received, we have made adjustments to the calculation methodology in 
calculating the final dumping margin in this proceeding. See Analysis 
Memorandum for Kazchrome, Alloy 2000, and Considar (March 25, 2002) 
(``Analysis Memo'').

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by Kazchrome, Alloy 2000, and Considar for use in 
our final determination. We used standard verification procedures 
including examination of relevant accounting and production records, 
and original source documents provided by the Kazchrome, Alloy 2000, 
and Considar. For changes from the Preliminary Determination as a 
result of verification, see Analysis Memo.

Use of Partial Facts Available

    In accordance with section 776 of the Act, we have determined that 
the use of partial facts available is appropriate for certain portions 
of our analysis of Kazchrome, Alloy 2000, and Considar. For a 
discussion of our determination with respect to this matter, see 
Analysis Memo.

Nonmarket Economy Country

    As of the date of initiation of this investigation, Kazakhstan was 
considered a non-market economy (NME) country. On June 28, 2001, the 
Department received a request from respondent requesting that the 
Department revoke Kazakhstan's NME status under section 771(18)(A) of 
the Act. On July 5, 2001, the Department received a letter from the GOK 
also requesting that the Department revoke Kazakhstan's NME status. 
Consistent with the factors described in section 771(18)(B), the 
Department considers the extent to which resources are allocated by 
market or government, taking into account currency and labor markets, 
pricing, and production and investment decisions.
    After a thorough examination of all relevant information available 
to the Department, we have revoked Kazakhstan's NME status under 
section 771(18)(A) of the Act, effective October 1, 2001. See 
Memorandum from George Smolik to Faryar Shirzad: Antidumping Duty 
Investigation of Silicomanganese from Kazakhstan--Request for Market 
Economy Status (March 25, 2002).
    Kazakhstan today has a fully convertible currency for current 
account purposes, and exchange rates are market based. Legislation on 
wage reforms is well advanced in Kazakhstan, with workers able to 
unionize and engage in collective bargaining, negotiating wages and 
benefits; further, the mobile workforce is free to pursue new 
employment opportunities. Kazakhstan is open to foreign investment, and 
investors have responded, particularly into the oil, gas, and metals 
sectors. The allocation of resource decisions in Kazakhstan now rests 
with the private sector, with the GOK largely limiting price regulation 
to natural monopolies; the state's involvement in Kazakhstan's banking 
system is now limited to NBK supervision of commercial banks; further, 
recent increases in bank assets and deposits, and bank consolidation 
all indicate that Kazakhstan's banks are behaving as financial 
intermediaries. In addition, price liberalization is practically 
completed in Kazakhstan.
    Kazakhstan has successfully privatized most of its economy, 
however, it has not advanced as far as other recently graduated market 
economies, and it appears to have stalled on additional privatization 
reforms. Nevertheless, Kazakhstan's lack of progress under this factor 
is only one of several price indicators in the economy, and does not 
reflect the country's other reforms.
    Nevertheless, the totality of Kazakhstan's reforms in liberalizing 
its economy demonstrate that it has completed the transition to a 
market economy. Overall, deregulation and a new regulatory framework 
for the normal operation of a market economy has progressively replaced 
the old system of regulation. Based on economic reforms reached in 
Kazakhstan, as analyzed under section 771(18)(B) of the Act, the 
Department finds that Kazakhstan has operated as a market-economy 
country as of October 1, 2001, and that this finding be effective for 
all current and future administrative proceedings.

[[Page 15538]]

    Therefore, because the POI for this investigation precedes the 
effective date of market economy status, this final determination is 
based on information contained in the non-market economy questionnaire 
responses submitted by respondents.

Market Oriented Industry

    On July 12, 2001, Kazchrome requested that the Department make a 
determination that the silicomanganese industry in Kazakhstan operates 
as a market-oriented industry (``MOI''). For our preliminary 
determination, the Department found that we were not able to make a 
preliminary determination on the MOI claim because respondents had not 
yet responded to our supplemental questionnaire. On December 7, 2001, 
Kazchrome submitted a response to the Department's November 1, 2001, 
supplemental questionnaire.
    For the final determination, we found Kazakhstan to be a market 
economy country effective October 1, 2001. Because Kazakhstan will now 
be treated as a market economy country for future proceedings, it is 
not necessary to address the issue of whether the silicomanganese 
industry operated as a MOI in this proceeding.

Separate Rates

    For this final determination, the Department is continuing to 
regard Kazchrome as not eligible to receive a separate rate, as 
explained in the Preliminary Determination, because Kazchrome states 
that it has no knowledge of the destination of its merchandise prior to 
its sale to Alloy 2000 and we did not find information to show 
otherwise during the course of verification. See ``Separate Rates'' 
section of our Preliminary Determination.

Kazakhstan-Wide Rate

    As discussed in our Preliminary Determination, the Kazakhstan-wide 
rate will be the calculated margin for Alloy 2000, the sole exporter. 
See ``Kazakhstan-Wide Rate'' section of our Preliminary Determination. 
There has been no other evidence submitted since the Preliminary 
Determination to change this determination. Accordingly, we have 
calculated a Kazakhstan-wide rate for this investigation based on the 
weighted-average margin determined for Alloy 2000. This Kazakhstan-wide 
rate applies to all entries of subject merchandise.

Suspension Agreement

    On November 19, 2001, the GOK submitted a proposal for a suspension 
agreement in accordance with the Department's regulations at 19 CFR 
351.208. On February 22, 2001, the Department met with representatives 
of the GOK to discuss the GOK's proposed suspension agreement. No 
agreement was concluded.

Fair Value Comparisons

    To determine whether sales of silicomanganese from Kazakhstan were 
made in the United States at LTFV, we compared constructed export price 
(``CEP'') to NV, as described in the ``Constructed Export Price'' and 
``Normal Value'' sections of the Preliminary Determination. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we calculated 
weighted-average CEPs.

Surrogate Country

    For purposes of the final determination, we continue to find that 
Egypt remains the appropriate primary surrogate country for Kazakhstan. 
For further discussion and analysis regarding the surrogate country 
selection for Kazakhstan, see the ``Surrogate Country'' section of our 
Preliminary Determination.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing the U.S. Customs Service (``Customs'') to continue to suspend 
liquidation of all imports of subject merchandise entered, or withdrawn 
from warehouse, for consumption on or after the date of publication of 
the Preliminary Determination in the Federal Register. We will instruct 
Customs to continue to require a cash deposit or the posting of a bond 
equal to the weighted-average amount by which the NV exceeds the EP, as 
indicated below. These suspension of liquidation instructions will 
remain in effect until further notice. The weighted-average dumping 
margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              (percent)
------------------------------------------------------------------------
Alloy 2000, S.A............................................       247.88
Kazakhstan-Wide............................................       247.88
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed, within five 
days of the date of publication of this notice, to the parties in this 
investigation, in accordance with section 351.224(b) of the 
Department's regulations.

International Trade Commission Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our affirmative determination of sales at LTFV. As our final 
determination is affirmative, the ITC will determine within 45 days 
after our final determination whether imports of silicomanganese from 
Kazakhstan are materially injuring, or threaten material injury to, the 
U.S. industry. If the ITC determines that material injury, or threat of 
material injury does not exist, the proceeding will be terminated and 
all securities posted will be refunded or cancelled. If the ITC 
determines that such injury does exist, the Department will issue an 
antidumping duty order directing Customs officials to assess 
antidumping duties on all imports of the subject merchandise entered 
for consumption on or after the effective date of the suspension of 
liquidation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: March 25, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.

APPENDIX I

A. Market Economy
    Comment 1: Market Economy
    Comment 2: Normal Value
B. General Issues:
    Comment 3: Financials Surrogate Values
    Comment 4: Manganese Ore Surrogate Value
    Comment 5: Rail Freight Surrogate Value for Russian Portion
    Comment 6: Indirect Selling Expenses
C. Verification Issues:
    Comment 7: Raw Material Losses in Usage Rates
    Comment 8: Electricity Usage Rate
    Comment 9: Raw Materials Transport Distances
    Comment 10: Inland Freight Distance
    Comment 11: Ocean Freight Charges
    Comment 12: Inventory Carrying Costs
    Comment 13: U.S. Insurance Charges
    Comment 14: U.S. Sales Database errors

[FR Doc. 02-7954 Filed 4-1-02; 8:45 am]
BILLING CODE 3510-DS-P